1) If the carbon tax/cap and trade will only raise energy costs $140 per person, then how will it make a difference whatsoever in carbon emissions? For that little money, the energy producers will just pass the costs along to the consumer without reducing emissions whatsover. I simply do not believe it because it defeats the alleged purpose of the cap and trade system.

2) Any reduction in US carbon emissions will be 100% negated and then some by China alone. So every household will be paying $140 (or likely many times more than this) for NOTHING.

3) We are not focusing on the true pollution like particulate matter from burning coal, chemical waste, and pollution of our rivers and lakes (yes, these are still being polluted) among many other REAL problems.

5:56 pm April 21, 2009

Follow the Money wrote :

As usual with large issues and politicians grandstanding….follow the money to see who will profit the most. In the case of a cap and trade system, the federal government will get an upfront fee for a permit and then those permits will be traded endlessly on Wall Street, just like a stock. This is exactly analagous to a company selling an IPO at $10 and it immediately rises to $25 during the first week and years later it is a $100 stock. The company only received $10, even though it is a $100 stock. Wall Street and investors received the other $90.

So, we are looking at a Trillion Dollar Market for carbon trading in which the government will get a little money, Wall Street traders and investors will get billions, if not trillions, and the American public (especially the working poor) will foot the bill and line Wall Street’s pockets some more (See the European system if you don’t believe me). Energy costs are projected to skyrocket 20% initially and continue to rise from there under a cap and trade system.

And the proposed benefit for all the extra cost of energy? If you look at Europe’s cap and trade system, it has done absolutely nothing to the rise stop global CO2 emissions. If fact, worldwide CO2 output is at an all time high. You see, politicians and whoever is backing this scheme wants you to believe that making fossil fuels more expensive will stop global warming. It won’t because global warming is a global problem, not a local problem. There is nothing that the United States or any other country can do about it without 100% cooperation from the entire world. So, unless the whole world agrees to reductions, we will not see any benefit for our increase in energy costs.

A flat tax on fossil fuels would make more sense. It would make fossil fuels more expensive and all of the money would go to the government, instead of mostly going to Wall Street traders and investors, so that they could fund alternative energy. But since this does not profit anyone, no one is trying to ram rod it through congress like a cap and trade system.

Follow the money…

6:02 pm April 21, 2009

Anonymous wrote :

The author of this particluar piece headlines his story by stating that a cap-and-trade bill would cost less than a dollar a day to taxpayers in increased fees. This is under the assumption that monies paid to the goverment would be refunded back to tax payers, since this rarely happens, I disagree and believe that we will pay closer to what Republicans state.

6:08 pm April 21, 2009

US Expat wrote :

Other countries are laughing while we continue to make ourselves less competitive, straw by straw, until the whole bundle is gone. It will only cost pennies on EVERY DOLLAR THAT MOVES. They are trying to turn the entire country into a California. We are currently shuttering a plant in California because the regulatory climate is too onerous. It is a win for Monterrey, Nuevo Leon. Jobs are not being willingky exported, they are being chased out.

6:09 pm April 21, 2009

RJ wrote :

Whomever believes Waxman's claims that the costs of the bill will be relatively small, is kidding themselves.

There will be costs that cascade down through various industries that will pile up on individuals, consumers in general, and tax payers alike. People will be hit multiple ways through numerous unexpected sources with hidden, semi-hidden, and overt taxes resulting from this action.

Speak up now, speak up loudly and remain informed against this scam. This is just another way for this new administration to put another choke-hold on its citizens. This is all about power and control, not for the "good of the nation" as these hypocrites are billing it. Beware and be smart.

6:12 pm April 21, 2009

Only Pennies A Day wrote :

It will only cost pennies per day. 10,000 pennies a day, but pennies nevertheless.

6:26 pm April 21, 2009

Jim Bullis, Miastrada Co. wrote :

Not far in the background of this energy debate is are strong forces forming to shift from foreign oil as the source of energy for driving cars to electricity, using the plug-in vehicle approach. The marginal response by the electric system to such plug-in vehicles is burning of more coal. That fact needs to be considered in the present debate as it would raise the stakes to include impacts on both electric power consumers as we know them and the motorists of the country.

A careful study by NRDC and the EPRI showed that hybrid vehicles were actually degraded by conversion to plug-in operation, and NRDC concurred that under such conditions conversion to plug-in was not recommended. (see http://www.miastrada.com/references)

A more serious danger then appeared in the possibility that typical large US type vehicles might be converted to plug-in operation while skipping the step of making that vehicle an efficient hybrid first. This would make the CO2 impact of making cars into plug-ins significantly worse.

and leading venture firm Kleiner Perkins by virtue of sponsoring the new Fisker plug-in which is surpassed as an environmental disaster only by the now existing plug-in Hummer hybrid version, that uses the same engine. (seehttp://blog.wired.com/cars/2009/04/behold-americas.html)

These extreme examples add to other powerful forces getting set for a coal powered future.
Warren Buffet has effectively endorsed this trend by combined investments in US railroads and the leading Chinese electric car company.

Then add the list of plug-in enthusiasts, misguided by a premature lure of cars plugged in to electric power.

I do note however, that electric power is a redeemable system when coal burning is no longer the marginal response.

I add a qualification that even coal fired electric power is not bad if only a very small amount of it is used.

The crisis we are heading for is the apparent disregard for efficiency as the primary goal.

With an emerging enthusiasm for inefficient plug-in vehicles, the demand for electric energy seems certain to go up, and it is going to be very difficult to legislate meaningful caps on CO2 emissions. This is particularly a concern in light of the probable increase of the price of natural gas, for the tax for exceeding the cap has to relate to the cost of that alternative fuel. With a likely failure to control which fuel we use, we could well end up with a country powered even more than it is now by coal; even more than China.

I write from a point of view interested in promoting high efficiency motor vehicles for some time in the future, that could be a path to reducing CO2 when we actually decide that action is required. See http://www.miastrada.com.

6:33 pm April 21, 2009

Peter Taglia wrote :

Of course not doing anything will surely be FREE, right?

We shoot ourselves in the foot if we let Europe and Asia develop the technologies to make real changes in the way we produce and use energy.

6:36 pm April 21, 2009

Howard wrote :

Call me skeptic. Somehow I don't feel very comfortable with such a low ball estimate when it stands in stark contrast to what other 'experts' are saying. It also presumes (1) that all such proceeds will be returned to taxpayers (ha ha - just like Social Security was sacrosanct) (2) the cost of renewable energy will remain constant (not if OUR EPA has anything to say about it)

Remember NAFTA and Ross Perot's giant sucking sound analogy? I seem to hearing it again but this time it's coming from East not the South.

6:39 pm April 21, 2009

Joshua wrote :

Peter,

There is not way to know what not doing anything will cost. Yet I can assure that cap and trade will cost money today, right now. And to do so because of the unknowable consequences of more CO2 in the air, while having any reduction offset by the rest of the world seems so wasteful.

6:42 pm April 21, 2009

RF wrote :

This is disingenuous at best. No, it's just a simple lie. The congress in closed session was told Cap and Trade should generate 3 or more times the $700 billion original estimate of revenues in ten years for selling the emission permits. That is over $2 trillion dollars in tax revenue! Plus, these funds are going to be principally used to finance HEALTH CARE reform. Sure, Obama pledged not to raise income or sales taxes, instead the plan is to bury the tax on energy in the cost of every product and service created in our economy. Lawyers are liars when they parse the truth.

6:56 pm April 21, 2009

fries wrote :

There is a tried and true sales technique called "reduce it to the ridiculous." Yes folks, you can have (fill in the blank) for just pennies a day! Waxman is selling - I'm not buying.

7:06 pm April 21, 2009

Bud Hunt wrote :

Does anyone believe anything coming out of the obama administration?

7:10 pm April 21, 2009

Rustypelican wrote :

The end cost to consumers is the least of the costs associated with this boondoggle. These ideologues don't care about economic growth and, in fact, despise it because increased economic activity increases emissions. Does Obama actually believe companies won't relocate to coal and nuclear generating economies like China, India, and the rest of the developing world? All we will do is hasten America's economic decline. Maybe that's what Obama and the keft really want, as long as 51 percent of the voters can be addicted to government spending and vote reliably Democrat.

FTM is right in saying that the government gets some money up front, after that the permits are traded. However, I suspect the permits are annual so the government gets continuing money, and thetrading is more like an auction where companies that want to stay in business have to compete to buy what they need. Over time, government lowers the cap which increases their revenue take.

Who will buy them? The companies that can make the most product and the most valuable products for the least amount of pollution can afford to pay the most for their permits. This will be a cost of doing business and he costs will be rolled up into their products, paid for by consumers. some of those consumers will also be stockholders who will benefit because their company will do well compared to some other company that cannot afford the permits it needs for some dirty business and consequently folds.

Or moves to China.

Investors in the companywill benefit from the permits but indirectly. There may also be some speculating or a futures market in permits, but that does not drive the price. At the end of the dayor month a futures contract has to be settled at the price some user will actually pay, which he won;t do if there is no profit in it.

FTM is right that a local market cannot solve a global problem (if there is one).

With Cap and Trade the government gets a one time nfusion of money, so where does the money come from to lower other taxes to compensate for increased cost to the consumer? With a carbon tax the government gets a stream of moey which it can redistribute according to any scheme it can sell: wealth redistribution, clean power alternatives, etc.

Either way the money comes out of the consumers pocket, and unless the government sends it back to the consumer in other reduced taxes, it wll hurt the economy.

C ap and trade is more efficient at controlling the "pollutant" in question, and a carbon tax is more efficient at raising money. Under a carbon tax polluters may simply opt to pay the tax and not reduce pollution.

Especially if the cost is as low as "currently" promised. Remember what happened with income tax.

Don't see how it can achieve much at this price, and if the price is high enough to curb CO2 emission it may do more damage to people by wrecking their economy than CO2 will, eventually.

7:23 pm April 21, 2009

Zhoff wrote :

This is the same kind of analysis that said the war in Iraq would pay for itself. It is quite simply impossible for a change to the entire structure of the US energy industry will only cost the average household $140 per year. Heck, in an average year, most people's utility rates go up more than $140 simply through rate increases.

7:35 pm April 21, 2009

Pennsylvania Farmer wrote :

Yeah, and nobody earning less that $250,00 would see their taxes go up and on, and on, and on. What total horse feathers. Thanks but no thanks. The words just said by the EPA are at variance with the words previously said.

7:57 pm April 21, 2009

Common Sense wrote :

We spend a little over $1 trillion a year in energy (courtesy of the EIA), which is around $3500 per year for every man woman and child in this country. Less than 1% comes from "renewables" considered "green." If we move this percentage to 20% in the span of 6 years as the bill calls for, and these technologies cost on average 3 times as much as what we currently use, than all of a sudden, that $1 trillion per year goes to $1.4 trillion, which is now around $4600 per man, woman and child. I think that is QUITE A BIT MORE than $150 per FAMILY per year????

8:07 pm April 21, 2009

If and when wrote :

"The cost to households($ 150) was calculated on the assumption that Washington will give MOST of the cap-and-trade proceeds straight back to voters. But that isn’t close to a done deal yet." So if $ 150 is the smaller part of the total cost, households do end up with a LOT higher costs- especially those not deemed needy enough by the government. Proves the opposition's point.

8:19 pm April 21, 2009

derek wrote :

only a federal bureaucrat would call hundreds of dollars "pennies". time for another tea party?

8:24 pm April 21, 2009

RogerB34 wrote :

Pennies a day to pay off Waxman and Markey is about right.
As for rebates to voters, the rebate will be targeted to the "middle class" not paying FIT.

8:34 pm April 21, 2009

hsr0601 wrote :

The passage of defining energy bill might be the road to economic recovery world-wide through the highly-anticipated Global Green New Deal, better yet, it is going to facilitate shift from the destructive war spending to the meaningful health care expenditure, in doing so, the complications in the ailing economy and health care alike will likely be explained.

10:32 pm April 21, 2009

blablabla wrote :

Do not worry about the cost nobody in the world will be able to pay it...?

10:53 pm April 21, 2009

Hydra wrote :

Common Sense:

If we now spend 1 trillion then three times as much is 3 triliion. And that is just operatin costs: it is the capital cost that will kill you. We run power plants for decades to pay them off, and now we are going to replace them wholesale for pennie a day?

----------------
If and When: Where are the proceeds coming from?

Assuming there is some flow to the government and they turn around ad give it back some other way, then the overhead on that transaction has got to be aroeund 15%.

If we are going to get 1`5% less for our money, how about a 15% tax cut?

7:20 am April 22, 2009

bill-tb wrote :

Yep, and health care is free. We can spend our way to prosperity.

When will people learn, you are being lied to about most everything the government does.

9:31 am April 22, 2009

Sam wrote :

I doubt all of this "pennies a day" talk. The $150/year cost appears to be the cost of the carbon itself, it does not take into account the cost of the emission reduction equipment that will be required to lower the CO, CO2, and C emissions or the costs associated with maintaining the new equipment or training people to operate it.

$3000/year is a strecth, I do not believe that either, but I can believe that Carbon taxing will end up costing Americans around $1000/year.

Lastly, lets do some common sense math here. If the Gov't says carbon is $100/ppm, the utility passes that charge on to us, we pay $100/ppm, and then at the end of the year the Gov't gives us back $50/ppm shouldn't the cost of Carbon be $50/ppm? The only reason I see the benefit of the additional $50/ppm is so the utilities can accumulate that money and gain massive interest on it before paying the Gov't, and the GOv't can do the same prior to paying us.

11:41 am April 22, 2009

Follow the transfer of power wrote :

Anyone who believes carbon controls don't represent a huge increase in the presence of government in our daily lives needs to think the issue through. A good bureaucracy never misses a chance to expand its power - we'll soon be seeing personal carbon controls, travel limits, you name it, all in the name of reducing our use of fossil fuels. Has anyone observed government shrink lately?

Further to this, anyone who believes that a carbon tax (pay attention here, Follow the Money) is more transparent than a cap and trade system is ignoring the evidence already before us - does anyone think the current tax code is transparent and logical? Wait until the current crop of earmarkers get hold of a carbon tax and start thinking about carbon tax carveouts for "endangered industries". I wonder what the equivalent of the investment tax credit will look like for carbon taxes?

The math here is simple: fossil fuels, and power based on fossil fuels, will cost 30% to 50% more once we have a carbon tax. Cap and trade as proposed, with 100% auctioning and revenues to the government, will have an almost identical effect. Look at your credit card receipts - how much did you spend on gasoline in the last 2-3 years? Look at your utility bills - it's a good bet that 50% of the power you used was based on fossil fuels. It's higher than that in the midwest and southeast.

But who are you going to believe? Henry Waxman or your own lying eyes?

12:32 pm April 22, 2009

Wake up wrote :

Hey idiots, how many of you have an economics degree? That's what I thought. Before you whine about this, it would behoove those of you that are just drinking the Limbaugh Kool-Aid to rethink what the actual ramifications are. Government is a necessary evil that is continually more relevant in a globalist economy. For those of you complaining that China and India will pass us up if we control our emissions- guess what, it's going to happen anyways. They have 1.3 and 1.1 billion people, respectively. How the hell do you see any situation in which the US economy can be stronger than them in the long run? Are you thinking? Energy prices will soar if we continue down our current path, without any regulation- gas prices will be sky-high, eventually. Supply and demand, guys. Quit whining about cutting emissions. It needs to happen, and no matter what, energy will cost more in the future. It's just a fact. Sorry to burst your bubble.

2:07 pm April 22, 2009

CTF wrote :

I fully understand both the concern about any additional financial burden felt by consumers and the urgency with which we need to act to stem the tide of AGW. But it need not be a choice. A carbon tax shift approach is simple, transparent, and easy to administer. Moreover, the revenues from this approach can be recycled in tax relief for American families, protecting them and the overall economy. It's a win for the environment and a win for the economy.

3:19 pm April 22, 2009

Fire Keith Johnson wrote :

Fire Keith Johnson, the author of this junk.

This is shoddy reporting at best and outright propoganda at worst. I would expect this from congress or the EPA who are pushing an agenda, but from a source such as the Wall Street Journal is vile and despicable.

This "study" is bogus and reporting it without asking any questions or pointing out its obvious flaws is a blantant fraud. Energy prices, according to the epa and congress, will go up 20-30%. This report presupposes that consumers will receive some rebate at some point in time and that they will consume less energy every year.

Further, you have not even mentioned what the benefits of this extra cost are???? In reality the benefits are NOTHING. I REPEAT THE BENEFITS OF ALL OF THIS LEGISLATION AND EXTRA COST TO THE AVERAGE AMERICAN IS NOTHING. And you consistently fail to mention this on all the "reporting" on this blog.

I call for a boycott of this "blog". All rational and reasonable people should avoid it as it is nothing more than propoganda for enviornmental extremists. There is no journalism here, only blantant propoganda.

3:21 pm April 22, 2009

Fire Keith Johnson wrote :

I should add, this is a scary moment in time when the media and the Wall Street Journal do not stand up and speak out. This is exactly what happened right after 9/11 when the media let Bush run wild and dare not speak out against his power grab and violation of individual liberties.

I guess what was left of honor and duty in the media is dead.

6:02 pm April 22, 2009

Recycled arguments wrote :

CTF, how can you possibly consider tax revnue "recycled in tax relief for American families" to be even remotely possible? How much money is recycled back to families via the present tax code and what is the efficiency of that recycle? Why would you expect that to be any difference for carbon tax revenues?

Your position calls for a willing suspension of disbelief.

6:56 pm April 22, 2009

Mickey wrote :

Economic Stimulus. H.R. 5140, the Economic Stimulus Act of 2008, passed 385-35 on January 29, 2008 (Roll Call 25). It would provide about $150 billion in economic stimulus, including $101.1 billion in direct payments of rebate checks (typically $600) to most taxpayers in 2008 and temporary tax breaks for businesses. Creating money out of thin air and then spending the newly created money cannot improve the economy, at least not in the long term. (If it could, why not create even more money for rebates and make every American a millionaire?) The stimulus has no offset and thus increases the federal deficit by the amount of the stimulus because the government must borrow the rebate money. A realistic long-term stimulus can only be achieved by lowering taxes through less government and by reducing regulatory burdens. Marsha Blackburn voted FOR this bill.(Source: The New American – July 21, 2008)

I have an economics degree and $2 trillion dollars to fund health care is not going to make us any more energy independent. It will very likely force many jobs offshore. It's primarily a tax grab for cowardly politicians.

7:37 pm April 22, 2009

Ralph wrote :

I have an economics degree and $2 trillion dollars to fund health care is not going to make us any more energy independent. It will very likely force many jobs offshore. It's primarily a tax grab for cowardly politicians.

7:05 am April 23, 2009

CTF wrote :

RF: While I understand your skepticism, I think it's possible to legislate that kind of "recycling" by rebating the revenue from a carbon tax or by lowering another, regressive tax (like the payroll tax). At the end of the day though, I would argue that a cap and trade system practically begs for evasion and market manipulation (see the EU's experience) and demands the formation of a new, highly politicized market (see the mortgage-backed securities market). On the flip side, a tax is straightforward, transparent and avoids all of the pitfalls inherent to cap and trade while reducing emissions and incentivizing R&D.

5:58 pm April 23, 2009

Anonymous wrote :

Waxman just looks evil. Like somthign out of a dark, evil movie.

12:01 pm April 24, 2009

Carbon cowboy wrote :

The EPA study of Waxman contains several troubling items. It notes that CO2 prices will double if we don't accept foreign CO2 offsets. What makes them think that the foreigners will sell at less than the US market price? And who will be setting the market price when the EPA'a own assessment shows 80% of reductions coming from foreign offset purchases in 2015 and only decreasing to 50%foreign by 2025. Foreign offset developers will be selling them to us at $1000 per ton or 100 times the EPA price or 10 times the realistic US price of $100 for US power industry developed reductions...until power industry solutions can come on line. The EPA anslysis relies on Coal- CCS on line in 2015 which means we're already late breaking ground and the technology has not yet been fully developed. The cost per family will be $3000 plus plus.

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About Environmental Capital

Environmental Capital provides daily news and analysis of the shifting energy and environmental landscape. The Wall Street Journal’s Keith Johnson is the lead writer. Environmental Capital is led by Journal energy reporter Russell Gold, and includes contributions from other writers at the Journal, WSJ.com, and Dow Jones Newswires. Write us at environmentalcapital@wsj.com.